I-T Dept, Link PAN with aadhaar before March 2023


New Delhi: The Income Tax department on Saturday announced that permanent account numbers (PANs) not linked to Aadhaar will become “inoperative” by the end of March next year.

“Whatever is mandatory, is necessary. Don’t delay, fasten today!” the department said in a public advisory.

“Under the Income Tax Act, 1961, it is mandatory for PAN holders, who are not in the exempted category, to link PAN with Aadhaar before 31.3.2023. From 1.04.2023, unlinked PAN will not work,” he said.

The “exempt category,” according to a notification issued by the Union Finance Ministry in May 2017, includes people residing in the states of Assam, Jammu and Kashmir and Meghalaya; non-resident under the Income Tax Act, 1961; 80 years of age or above at any time in the preceding year and a person who is not a citizen of India.

A circular issued by the Central Board of Direct Taxes (CBDT) on March 30 said that when a PAN is not functional, an individual will be liable for all consequences under the IT Act and will have to face various consequences.

Such person will not be able to file IT return using inoperative PAN; pending refunds will not be processed; pending refunds cannot be issued to non-working PANs; pending procedures like defective returns cannot be completed when PAN is not working and tax will have to be deducted at higher rate.

“Apart from the above, the taxpayer may face difficulties in various other forums such as banks and other financial portals as PAN is one of the most important KYC (know your customer) criteria for all types of financial transactions,” the circular said.

CBDT frames the policy for the Income Tax department.

While Aadhaar is issued by the Unique Identification Authority of India to a resident of India, PAN is a 10-digit alphanumeric number assigned to an individual, company or entity by the IT Department.

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